It is quite normal that last Thursday's eurozone summit results were broadly acknowledged and came in for a certain amount of criticism too. I consider that it's positive that these results have been described as being insufficient but I also think that those who have described the way ahead as being wrong are in fact wrong themselves. When the authors of this criticism are essentially attacking their national political adversaries they are guilty of pettiness and political short-sightedness. Other reactions at the summit assumed a different tone, which was really useful and warrants a few more comments.
A Franco-German axis? The driving force for the agreements on 21 July clearly came from the meeting the day before between Angela Merkel and Nicolas Sarkozy. The president of the ECB, Jean-Claude Trichet, also took part in this meeting. Are we now encountering a Paris-Berlin axis, similar to the relationships between Giscard d'Estaing-Schmidt and Mitterrand-Kohl? This would be a superficial interpretation. The former relationships were based on a common goal, with shared objectives. This time the goal was finding an uneasy compromise, together with its accompanying distrust and based on the conditions of electoral concerns in France and the pressure of public opinion in Germany. The two camps were attempting to thrash out an agreement at the price of revising, if necessary, previous positions because politics also involves the right to get things wrong and contradict oneself. Nonetheless, I would not attach too much importance to the more or less real existence of a two-headed European axis. A dialogue between two partners is sometimes inevitable, especially when the United Kingdom is increasingly distancing itself from Community life and has placed itself on the sidelines. The positive results of Franco German meetings should be welcomed but the EU today is not the EEC of yesterday.
Mr Trichet's reasons. Why did he so fiercely oppose private banks assuming their responsibility for the fall in value in Greek Treasury bonds? Because the ECB had itself purchased around €15 billion of these bonds. It would have therefore lost out in its operations (which have been, at times, unavoidable and profitable) but if the EFSF took responsibility for its losses…
The Parthenon and the Greek islands will not be affected. Finland requested that additional funding to Greece be accompanied by guarantees based on the latter's natural resources such as the Parthenon or one or other of the islands in the Aegean Sea. Why would anyone be astonished that this idea was not included in the final Declaration? Let's not mix eternity with money problems.
Ireland has not made a commitment but… The Irish prime minister insisted on the absence of conditions on the reduction (obtained) of interest rates on future eurozone loans to his country. The counterpart to this reduction should be, in the opinion of several member states, European level harmonisation on the taxable base of corporate tax (basis for calculation). This issue has been dragging on for years. Legally, Enda Kenny has told the truth - he has not made any formal commitment. Paragraph 10 of the final summit declaration, however, indicates: “we note that Ireland is prepared to participate constructively in discussions on the draft directive on the common consolidated corporate tax base”. It is up to the readers themselves to decide whether this is a commitment or simply rhetoric. The fact remains that the harmonisation in question is largely considered as indispensable and that the European Commission provided a number of convincing reasons when it proposed this. Ireland has ultimately accepted a “constructive” debate.
Non-existent but useful. The tax on financial transactions is useful, even if it does not exist. It is the threat of its introduction that has convinced the banks to agree to assume (voluntarily, obviously) some of the losses that will result from the decrease in the value of Greek Treasury bonds that they possess. Hopefully, the soul of Mr Tobin will rest in peace because the dossier is not dead and buried - it is still pending, especially because the G20 is now expected to relaunch proposals for such a tax at an international level.
Uncertainty still affecting developments in Greece. Despite a number of reservations and criticism, the overall evaluation of the eurozone summit remains extremely positive both at the level of the results obtained and the commitments made on the immediate future. There is still, however, a fundamental question mark that remains. Will the country that has been a source of such positive developments in economic and monetary union be able to recover at a national level in order to fully take its place in the ultimately reconstituted EMU? This column will present a number of answers to this question tomorrow. (F.R./transl.fl)